Corn harvested forecast up for 2011/12 from last month

The U.S. corn production forecast for 2011/12 is raised 48 million bushels this month to 12,358 million. This month’s higher forecast reflects a 45,000-acre increase in harvested acreage to 84.0 million acres and a 0.5-bushel-per-acre gain in yield to 147.2 bushels per acre. Production trails last season by 89 million bushels.

Projected corn feed and residual use for 2011/12 is unchanged at 4,600 million bushels. December 1 stocks indicated a September-November feed and residual estimate of 1,838 million bushels, down 233 million from the same quarter for 2010/11. Feed and residual for 2010/11 is estimated at 4.793 million bushels, up 1 million bushels from last month, reflecting the small downward revision to estimated September 1 stocks reported in the January 12, 2012, Grain Stocks.

Projected food, seed, and industrial (FSI) use for 2011/12 is also unchanged at 6,405 million bushels. September-November corn FSI use was higher than the same period last year, partly reflecting increased use for ethanol, glucose and dextrose, and starch. Year-to-year, corn use for high fructose corn syrup (HFCS) slipped for the quarter. Corn used for HFCS in September-November 2011 was 119.6 million bushels (net of trade), compared with 126.2 million bushels during the same months in 2010. Corn used for glucose and dextrose during September- November 2011 was 65.8 million bushels, up from 65.1 million bushels during the same months in 2010. In September-November, corn used for starch production was 66.4 million bushels, up slightly from the 66.3 million bushels used during the same period last year.

Corn used for fuel alcohol production from September-November 2011 is estimated at 1,266 million bushels, up from 1,238 million in the same period last year. Record ethanol production during the first quarter of the marketing year was spurred by blenders maximizing production of ethanol before the Volumetric Ethanol Excise Tax (VEETC) expired on December 31, 2011. Record December ethanol production indicated by the U.S. Energy Information Administration’s weekly data boosted anticipated second quarter corn use. Production is expected to slow beginning in January. Projected corn use for fuel in 2011/12 is unchanged this month at 5,000 million bushels. Exports of ethanol have continued to strengthen during 2011, providing an additional outlet for U.S. production. High sugar prices have limited supplies of Brazilian ethanol, providing export opportunities for the United States.

U.S. corn exports for 2011/12 are raised 50 million bushels this month at 1,650 million bushels. As a result, total corn use for 2011/12 is also projected 50 million bushels higher to 12,655 million bushels but remains down from 13,055 million in 2010/11. Corn ending stocks for 2011/12 are expected to be 846 million bushels, down 2 million bushels from last month as the increase in production is more than offset by higher exports. Ending stocks are down 282 million bushels from last year. The stocks-to-use ratio is projected at 6.7 percent, the lowest since 1995/96 when it dropped to 5.0 percent.

With the increase in production and reported prices received by farmers to date, the 2011/12 season average farm price is projected 20 cents lower on both ends of the range to $5.70 to $6.70 per bushel. The corn farm prices reported by NASS have been running lower than prevailing market prices because of forward contracting. Producer deliveries of corn forward contracted at prices below the current market values are reducing the monthly farm prices reported by NASS.

Changes are also made this month to the 2010/11 corn supply and use tables. Corn ending stocks are lowered 0.6 million bushels to 1,127.6 million, resulting in an increase in feed and residual to 4,792.6 million bushels.